U.S. Should Replace Dollar Bills With Coins, GAO Says

The U.S. should replace dollar bills with dollar coins, a watchdog said, a move that could be unpopular with the public but ultimately save the government money.

Bloomberg News

“We continue to believe that the government would receive a financial benefit from making the replacement,” Lorelei St. James, a director at the nonpartisan Government Accountability Office, said in remarks prepared for a Congressional hearing scheduled for Thursday.

Mining and metals companies, mass transit agencies, vending machine manufacturers and other groups favor a switch to coins. They are pitted against the company that makes the paper for U.S. currency, Crane & Co., and broad public opinion in favor of keeping the greenback. Both sides have allies in Congress.

Ultimately, the benefits of a switch would only accrue over many years.

The GAO estimates that replacing $1 notes with $1 coins, which last decades longer than paper, could provide $4.4 billion in “net benefits” to the federal government over 30 years. That averages out to less than $147 million a year, a tiny drop in the fiscal bucket.

“We realize that replacing the $1 note with the $1 coin is controversial,” Ms. St. James said. “In fact, public opinion has consistently been opposed to the $1 coin.”

Last year, the U.S. Treasury curtailed production of dollar coins after finding that more than 40% had been returned to the government unwanted. At the time, government vaults held 1.4 billion such coins–enough to meet demand for a decade.

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